Shumlin outlines health care plan

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Posted on February 24, 2011 |

MIDDLEBURY — Gov. Peter Shumlin told Porter Medical Center officials on Tuesday to be patient in weathering what he believes will be a short-term financial storm en route to a new, single-payer health care system he said will bring long-term success and financial sustainability to the industry.

Shumlin, who took office last month, made his remarks at Porter’s annual meeting before a crowd of more than 100 hospital physicians, staff, consumers and board members who have voiced many concerns about recent state and federal health care policy that has included under-reimbursement through the Medicaid program and an ever increasing medical provider tax.

Such policy, Porter officials contend, helped create a $2 million loss for the medical center last fiscal year and the prospect of another big loss this year.

Shumlin said that in the short-term, he has little choice but to consider increases in such areas as the provider tax on hospitals and home health agencies, an assessment he said helps leverage federal Medicaid dollars. He said the state is facing a fiscal year 2012 revenue shortfall of around $176 million.

“I am trying to balance the need of balancing the budget and taking care of our most vulnerable citizens while maintaining the ability to draw down federal dollars,” Shumlin said.

Meanwhile, the governor is banking on the Legislature passing a single-payer health care plan he believes will cut medical costs, provide better service and ensure more predictable payments to providers.

That single-payer system must accomplish three things, according to Shumlin:

• Treat health acre “as a right and not a privilege.”

• Make sure that the health care follows the patient and that it not be a responsibility of the employer.

“That’s a huge jobs creator,” Shumlin said of taking the health insurance burden off employers. It is a factor the governor said could “reverse the osmosis on the bridge” of Vermonters going across the border for the tax advantages of New Hampshire.

Shumlin rejected suggestions that Vermont would see a huge influx of health care-dependent people if it adopts a single-payer system. He argued that Vermont is already a popular destination point for those seeking benefits that currently include Dr. Dynasaur, Catamount Health and the Vermont Health Access Plan.

“We’ve got the best plan in the country; it’s just that we can’t afford it,” Shumlin said.

“Small, rural hospitals will not survive,” he added of the current system. “You can’t ask (Porter President) Jim Daily and others to run a railroad in a system where you get 40 cents on the dollar from one customer, 50 cents on the dollar from another and every blue moon someone walks in the door and gives you a dollar for a dollar’s work. It doesn’t work.”

• Cost-containment. The governor suggested a few ideas to help achieve lower costs, including issuing citizens a health card that would record the medical service they received and the amount due. The card would also provide complete access to medical records. Shumlin said the medical card could save around 9 cents on each medical dollar spent by reducing the current bureaucracy involved with insurance company payments.

“This is basically using technology to contain costs and get rid of waste,” Shumlin said.

The governor also suggested the medical industry move from a fee-per-service system to one in which the provider is compensated for keeping people healthy.

“The perils are huge; I get it,” Shumlin said. “There are landmines everywhere.”

But he said the dangers of not pursuing a single-payer plan would be far worse. He said Vermont spent $2.5 billion on health care eight years ago. That sum has risen to $5 billion this year and is projected to go up by another $1.6 billion by 2015.

“The current system is just not sustainable,” Shumlin said.

He added there will be several deal-breakers for any health care bill that arrives on his desk. Shumlin said he won’t sign legislation that costs more money, that doesn’t contain health care costs, that allows insurance companies to become a hindrance to quality care, that rations services, or that perpetuates the current billing bureaucracy.

“If we can get this one right, by 2014, I am convinced we will grow jobs, grow economic opportunities,” Shumlin said.

Clearly, not everyone who listened to Shumlin’s talk in Middlebury College’s McCardell Bicentennial Hall was sold on his plan. Several Porter officials questioned Shumlin’s math and the wisdom of state government taking an even larger role in an industry upon which it has already foisted economic challenges. Porter Hospital laid off four workers earlier this month with the prospect of additional reductions in the future. Daily noted that he has been walking through the Porter campus lately with a serious eye on what the institution can do without.

But Shumlin reiterated sweeping change will be necessary to reverse an unsustainable course.

“What’s killing Porter is what’s killing every health care entity in the state,” Shumlin said. “It is the reimbursement system, it is the amount of resources we are throwing at it and that fact that Vermont businesses and individuals can’t keep up. We are all moving to higher and higher deductibles throughout insurance plans for more and more money.”